Gold Price Today Continue to Remain Near Rs 46,000, Five-Month Low. Should you Buy?
Gold price in India continued to remain at five-month low on Wednesday. On the Multi-Commodity Exchange (MCX), October gold contracts rose 0.17 per cent to Rs 46,042 for 10 grams at 0930 hours on August 11. The yellow metal has been hovering around Rs 46,000 zone for the last two days. Silver was trading flat on Wednesday. The precious metal future saw a marginal increase of 0.10 per cent to 62,700 on August 11.
In the international market, gold prices also edged higher on Wednesday. Spot gold was up 0.2% at $1,732.49 per ounce by 0245 GMT, while US gold futures rose 0.1% to $1,733.50. US Treasury yields hit their highest levels since mid-July. Higher yields increase the opportunity cost of holding bullion, which pays no interest. US dollar dollar index held firm near a three-week high against its rivals, making gold gold expensive for the holder of the other currencies. The investors are now keenly waiting for US personal consumption report due on Wednesday. The sudden increase in job employment has raised fears of a sooner-than-expected US interest rate hike among the investors. This was one of the main reason behind yellow metal price dropping to a four-month low in the international market on Monday.
“Chicago Fed president Charles Evans said that the current inflation spike shouldn’t push the Federal Reserve to tighten monetary policy prematurely, with more months of labour data needed before any changes as well as more certainty that the pace of price increases will remain above the Fed’s 2% target. International spot and futures gold prices have started flat to marginally higher this Wednesday morning in Asian trade. However, upside could be capped pressured by a stronger dollar and a rise in bond yields, while investors cautiously looked forward to US inflation data that could influence the Federal Reserve’s timeline to taper monetary support,” said Sriram Iyer, senior research analyst at Reliance Securities
“Technically, LBMA Gold could trade on negative note below $1735 levels could see $1721-$1708 levels. Resistance is at $1737-$1745 levels. LBMA Silver below $24.00 levels will continue its Bearish momentum up to $23.12-$22.70 levels. Resistance is at $23.60-$24.10 levels,” Iyer added.
“Domestic gold and silver prices and Bullion Index futures could start flat this Wednesday morning, tracking overseas prices. Technically, MCX Gold October below Rs 46,000 will continue its correction up to Rs 45,700-45,550 levels. Resistance is at Rs 46,050-46,200 levels. MCX Silver September is sustaining below Rs 63,000 below which could see Rs 61,000-59,900 levels. Resistance is at Rs 63,300-64,000 levels. MCXBULLDEX May could trade on Bearish note within the range of Rs 13,700-14,050 levels,” he added.
“Traders will be closely parsing speeches by a couple of Federal Reserve officials today, Loretta Mester and Charles Evans, looking for clues on the timing and direction of US monetary policy—especially after last Friday’s much-stronger-than-expected US jobs report. Separately, reports this week say the Biden Administration generally supports appointing Fed chairman Jerome Powell to a second term. The key outside markets today see the US dollar index firmer and hitting a three-week high. Nymex crude oil futures prices are solidly higher on a good corrective bounce from recent strong selling pressure and trading around $68.75 a barrel. The yield on the benchmark U.S. 10-year Treasury note is presently fetching 1.341%,” said Amit Khare, AVP- research commodities, Ganganagar Commodities Limited.
“Gold and silver both are trading at oversold zone. Momentum indicator RSI also giving positive divergence in four hourly as well as hourly chart. So one big short covering is pending in bullion’s, Traders are advised to make buy positions in gold and silver for short term period, traders should also focus important technical levels given below for the day: August gold closing price Rs 45,962, Support 1 – Rs 45,700, Support 2 – Rs 45,450, Resistance 1 – Rs 46,210, Resistance 2 – Rs 46,460. September silver closing price Rs 62,636, Support 1 – Rs 62,000, Support 2 – Rs 61,300, Resistance 1 – Rs 63,230, Resistance 2 – Rs 63,800,” he further mentioned.